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Software Piracy – Scapegoat of 2008

October 19, 2008 Games No Comments

Lately I’ve seen a lot of companies taking their games-in-development and as-yet unreleased games off of the PC shelf, and firmly slotting them into the console marketplace.

No ports. No release 6 months later with no mouse support, and lackluster presentation for full price.

PC gaming has been a hotly contested subject for a long time, make no mistake. Ever since the Xbox first came out, people have been proclaiming “THE DEATH OF THE PC IS NIGH” and other such fear-mongering. Generally for no better reason than some kind of superiority complex, because they want to feel like they’re getting value for their money when they spend upwards of $300 on a computer that is only really able to play games. There’s very little proven truth to these statements, and actually quite the opposite if you don’t simply look at NPD statistics, and add in the much more profitable category of digital distribution.

Unless you’ve been living under a rock, you’ve probably seen the dire posts such as “Spore most pirated game ever; over 500,000 downloads in first week of release”; and that the supposed “failure” of Crysis was entirely attributed by the developer, Crytek, to be due to software piracy. Noted for originally PC-exclusive games like Unreal Tournament, Epic announced in April that they wouldn’t be porting Gears of War 2 to PC, like they did the first iteration of the title, because of piracy issues.

And while both Crysis, and Gears of War were both pirated more than Ukrainian weapons transports off the Somali coast, I think there’s a much better explanation to why they didn’t sell as well as expected on PC. They weren’t very good games.

Sure Crysis was shiny, and was “A spectacular and beautiful sci-fi epic.”~ PC Gamer UK; but there sure wasn’t a whole lot of gameplay there. Most people could beat the entire game in under 9 hours, the voice acting was mediocre, the story was predictable most of the time and the rest of the time is was unpredictable in a predictable way. The game was hyped all to hell by the critics, but hype doesn’t sell games, or at least not a lot of them.

Gears of War was almost groundbreaking on the Xbox 360. Cooperative, bloody gameplay that used cover elements, and had a very tactical approach to gameplay. Mix in visceral weapons, a tragic story, and boatloads of action, and you have a recipe for an amazing game. But when you port it to PC? It’s all been done before. And in most cases better and 3 years ago.

But now I think I’ve found an offender in the console market that is every bit as bad as digital piracy. This isn’t pointed at a specific company, but more a specific practice; the purchase and sale of used games.

Say I have 10 people, and I want to sell one book to each person. All 10 of those people want to buy the book, but only half of them want to spend full retail. So 5 people buy the book on release day and read it, while the other 5 wait for the price to drop. Of the 5 that bought it, 4 of them decide that they don’t want to keep the book after reading it, so they offer to resell it to the other 5 for half what they paid for it. Thereby allowing them to spend that money on another book, and the next person in line gets to read it. The last person waits until the book hits the super-saver discount bin at the grocery store, and picks it up for 1/10 the value 3 years after it’s released.

That means, of the 10 people I was expecting to sell that book to, I only actually made a profit from 5 of them. And chances are, the people that bought the book used are probably going to turn around and sell it to other people for an even more reduced price.

Now compare that to me trying to sell the book as an E-book to the same 10 people, but you can’t resell it once you buy it. The first 5 people are still going to buy the book. They want it; fast, safe, and they don’t care how much it costs. The next 5 people don’t want to pay full retail, and they don’t want to wait, so they pirate it.

What is the difference to me? I still only sold 5 books either way. I’m only hitting half of my target audience. And worse yet, chances are the people that resold the books from the first example, are most likely going to go use that money to buy used books while they’re in the book store selling their old ones, because then they can get store credit for them, and get more for their trade.

“According to OTX’s report, the used software market in the U.S. is projected to be $1.3 billion (not including systems or accessories).” ~ April 2008, [Gamasutra]

According to OTX, a global research and consulting firm that specializes in providing online research, out of a total 76 million gamers in the USA, 45 million have purchased at least one new game, and one used game in the last year. Two and a half million buy exclusively used games, with the remainder buying exclusively new games. Of those that buy games, either new or used, fully a third of them will resell an average of 60% of the games that they buy, which will then get resold, to no profit to the publisher, developer, or anyone, except for the reseller.

Through applications of store credit and buyer discounts these sales are almost pure profit to the reseller so why would games stores ever even consider selling new games at all? If you consider the number of games that “fall off a truck” and get resold, at 90% resale the first week of release, why would anyone BUY new games either? To a publisher and a developer this is just like theft. The games could have been stolen right off the truck heading to games stores everywhere, and it means the same thing as having them resold. It’s a customer that they lost, and less money to fund the next game.

“…OTX has attributed this to the current economic downturn, and has also projected a marked increase in the online sales market, along with an upturn in used game purchases at GameStop.”~ April 2008, [Gamasutra]

Used games make up approximately $1.3 billion of a $10 billion industry in the US. When I was growing up, I’d be surprised if you could even find a number, never mind one in the 15% of all sales range. There wouldn’t be enough room in all the Classifieds sections in all the world for that many ads. At what point is industry going to start looking at these numbers and wondering how they could let so much income slip through their fingers? And while many people would say that once you purchase a product, you own it and can do whatever you want with it; read the EULA that comes with a piece of software you buy. They’re absolutely medieval in the protection of their IP, and you agree to them simply by opening the product to read the EULA.

“I’d actually make the point that for us second-hand sales is a very critical situation, because people are selling multiple times intellectual property,” said Jens Uwe Intat, senior VP and general manager for European publishing at EA. [Gameindustry.biz]

I don’t advocate piracy of any kind. I purchase all the games that I want and play, because I want to support the developers that made them. If you don’t support the developers, eventually they stop making money, and therefore stop making games we all enjoy. Having said that, developers have to stop abandoning the PC over piracy excuses. If they’re going to blame the PC as being unprofitable because of people stealing their product, maybe they should look to companies like Stardock, that release products with little to no copy protection and have had great success.

I would have less problem with developers abandoning a platform because they think it’s too hard to develop for, or because that’s not where their target audience is. But PC developers seem to think that because there were x number of graphics cards that meet the minimum requirements for their game, they should sell exactly x copies of their game. They seem to think that everyone that has a PC should be buying their game, or it’s a complete failure. If I’m running a restaurant, I don’t automatically assume that I should expect to sell food to the entire population of the city it’s in just because everyone has a stomach.

Maybe if game publishers would stop forcing developers to release betas of their games at full retail price, and force the general public to squash bugs just to play it. Possibly they could start taking the time to make sure all of the content is actually implemented before the game is released, and, just spitballing here, release a finished product.

That could actually result in your game selling well. But maybe using an uncontrollable force as an excuse for releasing a terrible product looks better to investors. Kind of like blaming your dog for eating your homework.

Support the developers kids.

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